(Yicai) Dec. 11 -- Cummins, an American power solutions provider, has opened its first research and development center for microgrid technologies in China, representing its second global facility to test such localized energy networks.

Following the establishment of its Power Integration Center in the United States, Cummins recently inaugurated the Cummins China Microgrid Innovation Center in Chongqing, Yicai learned from the Indiana-headquartered company.

Microgrids are energy networks that can operate independently or connect to the main power grid, typically incorporating solar panels, wind turbines, and energy storage systems.

Company executives highlighted that microgrids can be applied across diverse scenarios and potentially present an even more promising market than the energy storage industry. In China, the energy storage sector has experienced rapid growth, with industry projections indicating a market scale of CNY1 trillion (USD138 billion) by 2030.

The China facility will evaluate energy network solutions such as fixed and tracking photovoltaic systems. It also features a range of energy storage systems from different large brands, including self-developed products, as well as zero-emission power components such as hydrogen fuel cell modules.

The demand for microgrids is robust, especially in remote areas such as mines and oil fields, which are far from urban power grids, an insider from Cummins said. In recent years, data centers supporting the rapidly expanding artificial intelligence industry in China and the US have been exploring microgrid solutions to lower their electricity costs and carbon emissions as well as reduce their reliance on city power networks and traditional diesel backup generators.

Photovoltaic and wind power generation can be significantly impacted by sunlight duration and weather conditions, resulting in substantial power output fluctuations. By integrating microgrids with energy storage systems, lower-quality solar and wind power can be utilized more efficiently, achieving emission reduction and cost-saving objectives for enterprises.

However, innovative microgrid solutions, especially those connected to photovoltaic power plants or wind farms, require substantial upfront investments and the development of new energy storage infrastructure.

The adoption of new microgrid technologies could be accelerated if the government offers financial incentives for investments, expedites carbon trading implementation, and establishes comprehensive industry standards, the insider noted.

Editor: Emmi Laine